26 November 2008 News

 

Calastone applies to Euroclear to become Crest central sponsor

Calastone has applied to become a Crest central sponsor, with a view to allowing automated settlement for mutual fund transactions.

Calastone provides an electronic communication and message translation service for all participants including fund providers, distributors and transfer agents. Calastone claims to offer the opportunity for the mutual fund market to become fully electronic, without the need for membership fees or technical investment.

Calastone Transaction Network participants should be able to send or receive instructions using their preferred means of communication in any format, such as flat files, FIX, SWIFT, ISO15022, ISO2022, XML or proprietary formats. This could enable participants to have straight through processing irrespective of size or technology capabilities.

Through Calastone's execution management system, participants have the potential to track their trades and manage exceptions on a real-time basis throughout the transaction lifecycle. This is intended to help firms reduce their costs and operating risks.

Alain Raes, chief executive of Swift EMEA, stated: "Automation in funds order processing and settlement is key to enhancing value for the UK fund industry. We look forward to helping Calastone, Euroclear and our joint communities drive efficiencies and standardisation across their businesses over Swift."

Campbell Fleming, managing director of JPMorgan Asset Management UK said, "We are delighted to see, and work with, another entrant to the UK marketplace. The UK lags continental markets and practices, so we especially welcome anyone that is facilitating more efficient, quicker and cheaper ways to invest in UK mutual funds and make business simpler and safer for all concerned. As an early adopter of the IMA proposals, and its efforts in this area, we are keen to engage with quality providers to improve our services and standards. This is doubly important at a time when our industry is facing huge competitive pressures in difficult market conditions so it is good to see more competition and choice, which in the long run will improve what is being provided to our clients and the investing public."

Stephen Mohan, managing director of Cofunds added, "As an early adopter of the Calastone Transaction Network service, we have already realized significant cost savings and operational efficiencies. We fully support Calastone's efforts to help the mutual fund industry move to open standards in settlement as these will reduce costs and improve efficiencies for small and large players. We expect Calastone to be an element of our very successful asset servicing business for wealth managers."